Partnership is sometimes a dirty word in the business world, where often the name of the game is being a lone wolf. Some ventures require a “top dog” mindset, and those businesses do usually succeed… but the overlooked sector of successful businesses thrive off of their partnering ability.
Partnering allows businesses to go farther than they can alone and to help each other when one simply doesn’t have all the resources required. While some companies can be a powerhouse all on their own, others do not have the same opportunities and are led to think and work outside the box.
This leads to innovation and partnerships that thrive and grow exponentially – and growth is a good thing. Partnership marketing can give you a broader audience and larger marketing arena than going it alone.
Marketing that Works
Technology is constantly evolving at a lightning-fast pace, and marketing needs to evolve with it to stay relevant. Otherwise, your product, business, and sales will take a major hit. By developing a partner marketing plan, you can increase your sales and portfolio quickly if done correctly.
So what is it? Quite simply, working with another company or business to develop and implement a marketing plan that simultaneously benefits both parties.
Not-for-profit businesses are some of the most prevalent at doing just this. For example, a local animal shelter will partner with a pet store of some kind for a day or weekend – a certain purchase or purchase amount will benefit both businesses and elicits feelings of accomplishment for the customer.
This is a great example of two businesses creating a marketing plan that benefits both. Not limited to just not-for-profit companies, this technique can be quite lucrative in both tangible goods or intangible ones.
Another instance would be music festivals: different entertainers coming together in one location and receiving a portion of the profits. Music festivals are often home to smaller entities like vendors for food, souvenirs, and contests – all aimed and gaining publicity and generating more business after the festival is over.
If you want a more global example, Visa conducts a contest in which they invite smaller start-up businesses to come up with an idea that will integrate with Visa’s values and spur growth for both.
The most recent winner of the “Everywhere Global Events” challenge designed an integrated app that allows fans of events to be more involved – and these events, hosted by Visa, will benefit from more engagement from eventgoers, and the business itself will benefit from consumers using the app.
Now that you know what partner marketing is, the two most popular forms of this are affiliate marketing and distribution marketing. Both of which are extremely effective.
#1. Affiliate Marketing
Affiliate marketing is very common among websites – it usually looks like adding a link to another website within an article or blog post, and vice versa. You find this on social media as well with product influencers who will promote a product or store – they get the views and promotion, and the store gets a hit and maybe a sale.
Affiliate marketing is a big deal for those businesses that want to earn passive income. They earn revenue by letting others do the leg work for a small piece of the profit by profit sharing. Do this a few times, and the money that is earned will be more than your business alone could profit, for much less work.
A more specific example of this would be a blog that reviews products. The blogger makes money when someone visits their page, and if they review a product like vacuum cleaners and add links to the original company to generate sales, both partners will make money from it.
Online gamers are another source, an individual does a video series playthrough of a particular game, and they get the views they want, and the game company gets more interested consumers checking out and buying their product. Win-Win.
#2. Distribution Marketing
Distribution marketing, however, is a bit different- this includes some kind of “package” deal between two products. Buying one product that either includes another or has an incentive to buy a different product along with it.
For example: if you buy X and Y together, you get a 10% discount on both. Or, if you buy X product, you get $5 off your next purchase at Y store. There are many different ways to do this that are as unlimited as the imagination. One example of this would be cell phone companies.
The cell phone carrier, Verizon, partners with Samsung and Apple. Where Samsung and Apple are competitors and wouldn’t partner with each other, Verizon is not in the technology rat-race competition, they sell a different service – the ability to use those devices.
You’ll often see Verizon advertising some kind of deal on ____ phone/tablet if you add a new line or become a new customer. So if a customer switches to their service, and buys a promoted product, the customer will then receive a discount on their phone bill, or a rebate on the product, which incentivizes them to buy not only the phone but the service as well.
Other forms of partnership marketing are:
This allows one partner to profit from the use of another product for royalty share or profit-sharing. An example of this would be PC computers that partner with Microsoft to run the Windows Software platform.
While this is also under the umbrella of affiliate marketing, Event Sponsorship also falls into the category of distribution marketing as well. With the value of partnership fluctuating with the rise of hosting virtual events, partnering to sponsor events has changed to be a bit more product-driven.
The entertainment industry uses this partnership frequently in tv shows and movies. Product placement can also be used when selling products via mailings – take parenting magazines, for example, the magazine is one product, that includes placement and advertisement for other products within the same mailing.
When it Goes Wrong
Sadly, not every partnership works, and sometimes what starts well, ends on a difficult note. Partnership disputes are a real risk when partnering with anyone. To avoid this potential disaster, make sure that who you are partnering with is not your competitor in any way, and try to target the same audience to remain relevant.
Do your due diligence by checking out potential partners and make sure you will not be competing. With so many businesses and companies branching out and offering a plethora of products, it’s harder to find a partner that aligns with your needs and audience without offering similar things that may make you lose more business than it brings in.
Go into a partnership with clearly defined roles and a well-thought-out strategy to avoid confusion and potential arguments down the road. While this may seem common sense, it is not always as common as you think.
It should also be discussed what will happen if the partnership does not succeed in the projected way to avoid a negative experience. Having clearly understood roles and defined conflict management will be crucial in the event of problems arising.
The length of the partnership should be determined prior to enter into any agreements, verbal or written. A proper reporting structure is necessary to keep both parties informed with accurate numbers that allow both to see what is attributed to which partner.
This not only helps the current partnership but also projected growth and further partnerships in the future.
What is the Goal?
Having marketing goals is a counterpart to having a business plan. A proper business should always have a clear path ahead, and with laser-like focus, make steps towards that goal with every decision.
For many companies, growth is the word of the day. However, defining what growth looks like for your business is going to be different from what it will look like for another company.
It is fair to say that partnership marketing has been simply swept under the marketing rug. Read any marketing textbook and you will find chapters on digital, social, strategy, and branding, and amongst these, you will notice the odd reference to brand synergies between two companies.
However, search online and you will find articles, agencies, and job adverts on partnership marketing all under an array of titles; joint marketing, co-marketing, and merchant marketing.
All in all, Partnership Marketing is often used and easy to understand, but not really talked about as a marketing strategy by many sources. Why is this the world’s worst kept secret?
There isn’t really a conclusive argument as to why marketing sources aren’t more open to teaching on this subject, but it is easy to see that in its application, partnership marketing is easily one of the most profitable ways to market.
From global brands like Pepsi to Google, to small local agencies, partnership marketing is the new trend that works.
About the Author!
Joyce Kimber is an entrepreneurial writer. With years of marketing experience, she has been working with many businesses and startups including Streeter Law Firm which provides professional commercial litigation lawyers in Sydney, Australia. She always finds new ways to improve her work performance and productivity. Connect with her on Twitter via @joyce_kimber91.